ASSIGNMENT 3 – Qualcomm

Qualcomm, best known for its CDMA technology, is a wireless technology leader and one of the world's most
valuable semiconductor companies. It makes most of its revenue from selling chipsets and licencing patents to
handset manufacturers and infrastructure firms, with its services division and strategic efforts contributing just a tiny
portion. The Value Chain in Traditional Telecom End-users, handset manufacturers, chipset makers, infrastructure
providers, network operators, and application developers are often included in the Telecom value chain.
Qualcomm's main strength was technology development and chipset/software design, and the company, together
with Texas Instruments, was a significant participant in the chipset manufacturing industry. Qualcomm was an
integrated systems supplier, allowing phone manufacturers to concentrate on other aspects that set them apart.
Qualcomm plays a vital role in the telecommunications ecosystem.

Qualcomm primarily provided contract research and development services to the wireless telecommunication
industry. Qualcomm held an important position in the Telecom value chain by dominating the following segments:
Qualcomm CDMA Technologies (the chipset business), Qualcomm Technology Licensing (the licensing business),
Qualcomm Wireless and Internet (the services business), and Qualcomm Strategic Initiatives.

Qualcomm Strategic Initiatives:

Qualcomm pursued a "fabless" approach, focusing on chip design and development while outsourcing
manufacturing to third parties. Qualcomm's more recent technologies allowed for high-speed data and voice
transfer, as well as the usage of GPS, cameras, video, gaming, and other multimedia activities on mobile phones.
Qualcomm's research and development activities helped the firm shrink the size of its chipsets while providing
additional functionality and keeping costs low. Qualcomm was also working on new semiconductor products that
were not simply for phones.

Qualcomm Wireless and Internet:

Qualcomm's CDMA Technologies division created and commercialised wireless voice and data communication
integrated circuits and system software. Qualcomm's chipsets and accompanying software products were created
for wireless devices, such as mobile phone handsets and data cards, as well as the infrastructure equipment that
runs wireless networks. Qualcomm sold individual components and chipsets that included all of the essential
components, allowing them to provide a turnkey solution to clients who wanted one. Qualcomm was working on
new semiconductor products that will be used in mobile consumer electronics gadgets and mobile phone handsets.
In November 2006, the firm unveiled its "Snapdragon" chipset platform, which featured an ARM-based CPU and a
full range of wireless connectivity features for mobile computing.

Licence
For the right to utilise its intellectual property in the production and sale of CDMA devices, Qualcomm paid one-time
licencing fees and recurring royalty payments. Even if a handset maker used processors from a Qualcomm certified
chip supplier, it still needed its own Qualcomm subscriber device licence. Qualcomm has charged about the same
standard royalty rates across all three 3G CDMA-based technologies in the past (CDMA, WCDMA and TD-SCDMA).
Qualcomm began collecting royalties on all 3G device shipments worldwide when its licence agreement with Nokia
expired in July 2008.

Qualcomm Wireless and Internet:

Qualcomm Internet Services (QIS), Qualcomm Enterprise Services (QES), Qualcomm Government Technologies
(QGOV), and Firethorn were the four divisions that made up Qualcomm's Wireless and Internet sector. BREW, or
Binary Runtime Environment for Wireless, was a vital component of the sector and QIS. Over sixty commercial
operators had introduced BREW in 25 countries as of 2009.
Qualcomm MEMS Technology (QMT) developed the industry's first micro-electro-mechanical-systems (MEMS)-
based display for mobile devices. This new technological innovation offered low power consumption, colour and
high-resolution viewing quality in a wide range of environmental conditions. Qualcomm's strategic initiatives
segment primarily focused on promoting the development and adoption of 3G wireless communications
technologies worldwide. Qualcomm had also built a strong distribution network for television programming on an
"on demand" basis through its commitments. Qualcomm hired TV producers to develop original programming and
negotiated distribution deals for popular entertainment, news, sports, and children's programs. Qualcomm had
primarily built out its broadcast towers and purchased spectrum.
 ASSIGNMENT 3 – Qualcomm
The above facts from the case show the competence and importance of Qualcomm in the telecom industry's value
chain.